Janet Yellen Foresees 'Soft Landing' Amid Inflation Anxiety: 'I Believe That's The Path We're On'

Treasury Secretary Janet Yellen reassured that the U.S. economy is on track to handle inflation without plunging into a significant economic downturn, achieving what is known as a soft landing.

What Happened: The Wall Street Journal reported on Tuesday that Yellen shared her optimistic outlook at the CEO Council Summit. She suggested continued economic growth, a strong labor market, and decreasing inflation as indicators of a soft landing scenario.

"To me, a soft landing is the economy continues to grow, the labor market remains strong and inflation comes down. And I believe that's the path we're on,” she said

These comments came on the heels of Labor Department data showing nearly stable inflation with a 3.1% surge in the consumer-price index in November year-over-year, a mild decrease from October’s 3.2%.

Yellen, a former academic economist and ex-Federal Reserve Chair, proposed that inflation is gradually moving towards the Fed’s 2% target and does not anticipate the final phase to be particularly distressing for Americans.

See Also: As US Debt Crisis Deepens, ‘Rich Dad Poor Dad’ Author Robert Kiyosaki Warns Of Looming Economic Peril: ‘America Is In Serious Trouble Financially’

She refrained from commenting on the Fed’s plans to cut rates in response to falling inflation but noted that real interest rates are increasing as the Fed maintains steady nominal rates.

Why It Matters: This confidence in a soft landing is not unfounded, as economists have been optimistic about the U.S. economy achieving a rare "soft landing" despite inflation concerns, as reported by Benzinga in November in November.

However, the market is closely watching the Federal Reserve’s final meeting of 2023. The consensus suggests the rate-hiking cycle has peaked, with expectations for rates to stabilize between 5.25%-5.50%.

Despite the optimism, some, like businessman and author Robert Kiyosaki, warn of an impending economic crash that could turn into a depression.

Read Next: Stocks Edge Higher, ‘Fear Index’ Plummets To Nearly 3-Year Lows Ahead Of Fed Meeting: What’s Driving Markets Tuesday?

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